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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

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RED ROBIN GOURMET BURGERS, INC.
6312 South Fiddler's Green Circle, Suite 200N
Greenwood Village, CO 80111
(303) 846-6000

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On May 22, 2014

To our Stockholders:

        The annual meeting of stockholders of Red Robin Gourmet Burgers, Inc. will be held at 8:00 a.m. MDT, on Thursday, May 22, 2014, at our Red Robin Innovation Center, located at 10000 E. Geddes Ave., Suite 500, Centennial, Colorado 80122 for the following purposes:

1)

To elect Robert B. Aiken, Stephen E. Carley, Lloyd L. Hill, Richard J. Howell, Glenn B. Kaufman, Pattye L. Moore, and Stuart I. Oran, as directors of the Company for one-year terms;



2)

To approve, on an advisory basis, the compensation of our named executive officers;



3)

To ratify the appointment of Deloitte & Touche LLP as the Company's independent registered public accounting firm for the fiscal year ending December 28, 2014; and



4)

To transact such other business as may properly come before the meeting.

        We direct your attention to the proxy statement, which includes information about the matters to be considered at the annual meeting and certain other important information and which we encourage you to carefully review. Our board of directors recommends that you vote FOR the board's nominees for director, FOR approval of our executive compensation, and FOR approval of the independent auditor. Your vote is important.

        Stockholders of record at the close of business on April 1, 2014 are entitled to notice of, and to vote at, the annual meeting or any postponement or adjournment thereof. This Notice of Annual Meeting of Stockholders and related proxy materials are being distributed or made available to stockholders beginning on or about April 10, 2014.

        This year, we have again elected to provide access to our proxy materials on the Internet under the U.S. Securities and Exchange Commission's "notice and access" rules. Our proxy materials are available at the following website:

https://materials.proxyvote.com/75689M

        We also post our proxy materials on our website at http://www.redrobin.com/eproxy.

        We cordially invite you to attend the annual meeting. Whether or not you plan to attend, it is important that your shares be represented and voted at the meeting. Please refer to your proxy card or Notice Regarding the Availability of Proxy Materials for more information on how to vote your shares at the meeting and return your voting instructions as promptly as possible.

        Thank you for your support.

		By Order of the Board of Directors,
		Pattye L. Moore Chair of the Board of Directors

Greenwood Village, Colorado
April 8, 2014

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PROXY STATEMENT

        The Board of Directors ("board" or "board of directors") of Red Robin Gourmet Burgers, Inc. ("Red Robin" or the "Company") is providing this proxy statement to stockholders in connection with the solicitation of proxies on its behalf to be voted at our annual meeting of stockholders. The meeting will be held on Thursday, May 22, 2014, beginning at 8:00 a.m. MDT, at our Red Robin Innovation Center, located at 10000 E. Geddes Ave., Suite 500, Centennial, Colorado 80122. The proxies may be voted at any time and date to which the annual meeting may be properly adjourned or postponed.

PROPOSAL 1
ELECTION OF DIRECTORS

General

        As of the date of this proxy statement, our board of directors consists of eight directors. James T. Rothe has provided notice that he intends to retire effective as of the annual meeting. Consequently, the board of directors will consist of seven directors following the annual meeting, six of whom will be independent. The board of directors may decide at a later time to add one or more directors who possess skills and experience that may be beneficial to our board and the Company.

        At the 2012 annual meeting, the Company's stockholders approved an amendment to our certificate of incorporation to declassify the board of directors. Accordingly, after a three-year transition from a classified structure with three classes of directors serving three-year staggered terms, the 2014 annual meeting will be the first annual meeting of stockholders at which all of our directors are elected on an annual basis for a one-year term.

        The directors elected at this annual meeting will serve in office until our 2015 annual meeting of stockholders or until their successors have been duly elected and qualified, or until the earlier of their respective deaths, resignations, or retirements. Each nominee has consented to serve if elected and we expect that each of them will be able to serve if elected. If any nominee should become unavailable to serve as a director, our board of directors can name a substitute nominee, and the persons named as proxies in the proxy card, or their nominees or substitutes, will vote your shares for such substitute nominee unless an instruction to the contrary is written on your proxy card.

Selecting Nominees for Director

        Our board has delegated to the nominating and governance committee the responsibility for reviewing and recommending nominees for director. The board determines which candidates to nominate or appoint, as appropriate, after considering the recommendation of the committee.

        In evaluating a director candidate, the nominating and governance committee will consider the candidate's independence, character, corporate governance skills and abilities, business experience, industry specific experience, training and education, commitment to performing the duties of a director, and other skills, abilities, or attributes that fill specific needs of the board or its committees. While there is no policy with regard to consideration of diversity in identifying director nominees, the nominating and governance committee considers diversity in business experience, professional expertise, gender, and ethnic background, along with various other factors when evaluating director nominees. The nominating and governance committee will use the same criteria in evaluating candidates suggested by stockholders.

Directors and Nominees

        Below, you can find the principal occupation and other information about each of the director nominees standing for re-election at the annual meeting. Information related to each director nominee's key attributes, experience, and skills, as well as their recent public company board service is included with each director's biographical information.

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Recommendation of the Board of Directors

        Our board of directors recommends that you vote FOR the election of each of the nominees for director.

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CORPORATE GOVERNANCE AND BOARD MATTERS

Governance Principles

        The board of directors seeks to ensure that good governance and responsible business practices are part of our culture and values. To ensure that we achieve this goal, the board of directors has previously established corporate governance guidelines that it follows with respect to corporate governance matters, which are available on the investor relations section of our website at www.redrobin.com. The board of directors reviews the governance guidelines annually to ensure that they are timely, effective, and supportive of the board's oversight and other responsibilities.

Executive Development and Management Succession

        Executive development and succession is an important responsibility of the board of directors. Under the Company's corporate governance guidelines, the board maintains an ongoing policy and plan for the development and succession of the CEO and other senior officers. The board has delegated this responsibility to the nominating and governance committee. This program encompasses performance reviews of executives, developmental guidance for not only their current roles, but also for new strategic opportunities that may result from growth in and changes to the Company's operations, and succession planning for executives and their direct reports with high potential. As provided in our corporate governance guidelines, the succession policy and plan has a multi-year focus that encompasses, among other things, the following attributes:

•

criteria that reflect the Company's ongoing business strategies,



•

identification and development of potential internal candidates,



•

formal assessment processes to evaluate such potential internal candidates and their development, and



•

an emergency succession component to address the unforeseen loss of the CEO or other key executives through death, disability, or other similar emergency.

        The nominating and governance committee works closely with management to ensure that development and succession are anticipated, planned for, and addressed in a timely manner. Under the guidance of the committee, Mr. Carley and each of the executive officers conduct annual succession planning activities. This process includes annual performance reviews and evaluations of the CEO and executive officers, who also conduct evaluations and development of their direct reports.

        Mr. Carley regularly meets with the full board on his performance, and his annual performance evaluation is conducted under the oversight of the compensation committee. Mr. Carley conducts annual and interim performance and development evaluations of the other senior executives and reviews these evaluations with the compensation committee or full board.

        At least annually, and when otherwise necessary, the nominating and governance committee reviews, makes recommendations for, and reports to the board on programs that have been implemented by management for executive and leadership team development and succession planning.

Stockholder Engagement

        The board and management believe that the Company's relationships with our stockholders and other stakeholders are an important part of our corporate governance responsibility, and recognize the value of continuing communications. Among other things, engagement with our stockholders helps us to:

•

understand the larger context and impact of our operations,

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learn about expectations for our performance, and



•

assess emerging issues that may affect our governance practices, business, or operations.

        This approach has helped us to identify mutual perspectives and goals and to adopt a collaborative approach to these relationships, which has resulted in our receiving essential input from our stockholders. To this end, we regularly engage with our stockholders through attendance at investor conferences, issuance of press releases and other stockholder communications, and individual meetings throughout the year.

        We also recognize the connection between good corporate governance and our ability to create and sustain value for our stockholders. In response to evolving governance practices, regulatory changes, and concerns of our stockholders, the Company has made a number of changes to our corporate governance practices over the past few years.

        Highlights of our governance program include:

•

Fully declassified board of directors commencing with the 2014 annual stockholders meeting.



•

Independent chair of the board of directors.



•

All director nominees are independent other than our CEO.



•

All committee members are independent.



•

Frequent engagement by management with institutional investors.



•

Majority voting standard for uncontested director elections.



•

Annual review of our succession plan and talent development plan.



•

Limits on outside board service.

Board Leadership Structure

        The board recognizes that one of its key responsibilities is to evaluate and determine the optimal leadership structure so as to provide independent oversight of management. Accordingly, at this time, we believe it is appropriate for our board to maintain the separation of the roles of board chair and chief executive officer. Pattye L. Moore currently serves as chair of the board due to, among other things, her prior experience on public company boards of directors, as well as her extensive leadership experience within the restaurant industry.

        We believe that having a non-executive, independent board chair is in the best interest of the Company and our stockholders at this time. The separation of the roles of board chair and chief executive officer allows Mr. Carley to focus on managing the Company's business and operations, and allows Ms. Moore to focus on board matters, especially in light of the high level of regulation and scrutiny of public company boards. Further, we believe that the separation of those roles ensures the independence of the board in its oversight role of evaluating and assessing the chief executive officer and management generally.

Role in Risk Oversight

        Our executive officers have the primary responsibility for enterprise risk management within our Company. Our board actively oversees the Company's risk management and regularly engages in discussions of the most significant risks that the Company faces and how these risks are being managed. The board receives regular reports on enterprise risk areas from senior officers of the Company. The board delegates certain risk oversight functions to the audit committee. Under its charter, the audit committee is responsible for oversight of the enterprise risk assessment and

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management process framework and ensures that the board or a designated committee is monitoring the identification, assessment, and mitigation of significant enterprise risks. The audit committee oversees policies and guidelines that govern the process by which major financial and accounting risk assessment and management may be undertaken by the Company. The audit committee also oversees our corporate compliance programs and the internal audit function. In addition, the other board committees receive reports and evaluate risks related to their areas of focus. The committees regularly report to the full board on the assessment and management of these risks. The board believes that the work undertaken by the audit committee, together with the work of the other committees, the full board, and the senior officers of the Company, enables the board to effectively oversee the Company's risk management.

Board Membership and Director Independence

        Our board of directors has determined that each of our directors, except our CEO, Mr. Carley, qualifies as an independent director under the rules promulgated by the U.S. Securities and Exchange Commission (SEC) and The NASDAQ Stock Market® listing standards. Only independent directors are appointed to the board's audit committee, compensation committee, and nominating and governance committee. Accordingly, all members of those board committees are independent in accordance with The NASDAQ Stock Market® listing standards. There are no family relationships among any of our executive officers, directors, or nominees for directors.

Director Attendance

        The board of directors held eight meetings in 2013, including four in-person meetings. Each of our current directors attended at least 75% of the aggregate total of meetings of the board of directors and committees on which he or she served. The non-management directors of the Company meet at least quarterly throughout the year and as necessary or appropriate in executive sessions at which members of management are not present.

        The board of directors strongly encourages each of the directors to attend the annual meeting of stockholders. All of our current directors attended our 2013 annual meeting except for one director who was unable to travel to the meeting due to severe weather.

Committees of the Board of Directors

        Our board of directors has four standing committees: an audit committee, a compensation committee, a finance committee, and a nominating and governance committee. Each of our standing committees generally meets at least once each quarter. In addition, other regular and special meetings are scheduled as necessary and appropriate depending on the responsibilities of the particular committee. Each committee regularly meets in executive session without management present.

        Each board committee operates pursuant to a written charter. The charter for each committee is available on the corporate governance section of the investor relations tab of our website at www.redrobin.com. The committee charters are reviewed at least annually by the respective committee to revise and update the committee duties and responsibilities as necessary.

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Stockholder Submission of Director Nominees

        A stockholder may submit the name of a director candidate for consideration by the nominating and governance committee by writing to: Nominating and Governance Committee, Red Robin Gourmet Burgers, Inc., 6312 South Fiddler's Green Circle, Suite 200N, Greenwood Village, CO 80111.

        The stockholder must submit the following information in support of the candidate: (a) all information relating to such person as would be required to be disclosed in solicitations of proxies for the election of such nominees as directors pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and such person's written consent to serve as a director if elected; (b) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the Company's books, and of such beneficial owner, (ii) the class and number of shares of the Company that are owned beneficially and of record by such stockholder and such beneficial owner, (iii) a description of any agreement, arrangement, or understanding (including any derivative or short positions, profit interests, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of such stockholder's notice by, or on behalf of, such stockholder and such beneficial owner, whether or not such instrument or right shall be subject to settlement in underlying shares of capital stock of the Company, the effect or intent of which is to mitigate loss to, manage risk of share price changes for, or increase or decrease the voting power of, such stockholder or such beneficial owner, with respect to shares of stock of the Company, and (iv) whether either such stockholder or beneficial owner intends

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to deliver a proxy statement and form of proxy to holders of, in the case of a proposal, at least the percentage of the Company's voting shares required under applicable law to carry the proposal or, in the case of a nomination or nominations, a sufficient number of holders of the Company's voting shares to elect such nominee or nominees.

Communications with our Board of Directors

        You may communicate with any director, the entire board of directors, the independent directors, or any committee by sending a letter to the director, the board of directors, or the committee addressed to: Board of Directors, 6312 South Fiddler's Green Circle, Suite 200N, Greenwood Village, CO 80111, or by sending an e-mail to: Board@redrobin.com. The Company's chief legal officer will review all communications, categorize them, and forward them to the appropriate board member(s). Messages pertaining to administrative matters, ordinary business matters, personal grievances, and similar issues will be forwarded to the appropriate member of management.

        With respect to issues arising under the Company's Code of Ethics, you may also communicate directly with the chair of the audit committee, vice president of internal audit, or the compliance officer in the manner provided in the Company's Problem Resolution and Whistleblower Policy and Reporting Procedures. Both the Code of Ethics and the Problem Resolution and Whistleblower Policy and Reporting Procedures may be found on the corporate governance section of the investor relations tab of our website at: www.redrobin.com.

Certain Relationships and Related Transactions

Transactions with Related Persons

        Marcus L. Zanner.    Marcus L. Zanner, a former director of the Company who served on our board from 2009 until his retirement in 2013, is a principal of and holds, directly or indirectly, interests of between 45% and 100% in three privately-held entities that hold the leases for three of the Company's restaurants in Washington. Such leases were assumed in connection with the purchase of the 13 Red Robin® restaurants from Great Western Dining in 2006. For fiscal year 2012 and fiscal year 2013, the Company paid rent of approximately $1.2 million and $1.3 million, respectively, for these three restaurants, including percentage rent and related taxes and fees.

Review, Approval, or Ratification of Transactions with Related Persons

        The board of directors recognizes that transactions between the Company and certain related persons present a heightened risk of conflicts of interest. In order to ensure that the Company acts in the best interest of our stockholders, the Board has delegated the review and approval of related party transactions to the audit committee. Pursuant to our Code of Ethics and the audit committee charter, any related party transaction required to be disclosed in accordance with applicable SEC regulations must be reviewed and approved by the audit committee. In reviewing a proposed transaction, the audit committee must:

•

satisfy itself that it has been fully informed as to the related party's relationship and interest and as to the material facts of the proposed transaction and



•

consider all of the relevant facts and circumstances available to the committee.

        After its review, the audit committee will only approve or ratify transactions that are fair to the Company and not inconsistent with the best interests of the Company and our stockholders.

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Compensation Committee Interlocks and Insider Participation

        During the last completed fiscal year, Lloyd L. Hill, Richard J. Howell, Pattye L. Moore, and James T. Rothe each served as members of the Company's compensation committee. None of the members of the compensation committee is or has been an officer or employee of the Company. None of our current executive officers serves as a director of another entity that has an executive officer who serves on our Board.

Director Compensation

        Set forth below are the elements of our director compensation for 2013. There were no changes to director compensation in 2014.

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2013 Director Compensation

        The following table sets forth a summary of the compensation we paid to our non-employee directors in fiscal 2013:

        As of the end of the fiscal year 2013, the aggregate number of options and restricted stock units outstanding for each director is set forth below. Options are considered outstanding until exercised and restricted stock units are considered outstanding until vested and released.

Director Stock Ownership Guidelines

        In February 2012, the compensation committee updated its stock ownership guidelines for non-employee directors to increase the minimum ownership threshold, and revised the guidelines in August 2013 to express the guideline as a multiple of the director's retainer instead of a constant dollar amount (see "Executive Stock Ownership Guidelines" on page 36 for discussion of the ownership

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guidelines for executive officers). The current ownership guidelines state that non-employee directors should own an amount of the Company's common stock with a cumulative cost basis of at least five times the amount of the annual retainer for a director. Based on the current amount of the annual retainer for non-employee directors, that dollar amount is $200,000. The value of the director's holdings is based on the cumulative cost basis of common stock held, which is calculated using the price of the Company's common stock at the date of acquisition. Each director had three years from the adoption of the initial stock ownership guidelines in March 2009 to reach the minimum ownership threshold. New non-employee directors that join the board after adoption of the guidelines have five years from the time the director joins the board to reach the minimum ownership threshold. Non-employee directors may not sell, transfer, or otherwise dispose of common stock that would decrease such director's cumulative cost basis below the ownership guideline amount. All of our directors are currently in compliance with the minimum ownership threshold.

        The following table sets forth the ownership guidelines and the holdings of the non-employee directors as of March 10, 2014, valued at the acquisition dates pursuant to our director stock ownership guidelines:

Indemnification of Directors

        The Company has entered into agreements to indemnify its directors, executive officers, and certain other key employees. Under these agreements, the Company is obligated to indemnify its directors and officers to the fullest extent permitted under the Delaware General Corporation Law for expenses, including attorneys' fees, judgments, fines, and settlement amounts incurred by them in any action or proceeding arising out of their services as a director or officer. The Company believes that these agreements are necessary in attracting and retaining qualified directors and officers.

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STOCK OWNERSHIP INFORMATION

        Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Except as indicated by footnote, and except for community property laws where applicable, the persons named in the tables below have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them. The percentage of beneficial ownership for each table is based on 14,395,364 shares of common stock outstanding as of March 10, 2014.

Stock Ownership of Certain Beneficial Owners

        The following table sets forth information regarding beneficial owners of more than 5% of our common stock as of March 10, 2014. All information is taken from or based upon ownership filings made by such persons with the SEC or upon information provided by such persons to the Company.

Stock Ownership of Directors and Management

        The following table contains information about the beneficial ownership (unless otherwise indicated) of our common stock as of March 10, 2014 by:

•

each of our directors, including the board's nominees for election,



•

each executive officer named in the Summary Compensation Table, and



•

all directors and current executive officers as a group.

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COMPENSATION DISCUSSION AND ANALYSIS

        In this Compensation Discussion and Analysis, we provide an analysis and explanation of our executive compensation program and the compensation derived from this program by our executive officers, including our "named executive officers." For 2013, our named executive officers were:

•

Stephen E. Carley, Chief Executive Officer



•

Stuart B. Brown, Senior Vice President and Chief Financial Officer



•

Eric C. Houseman, President and Chief Operating Officer



•

Todd A. Brighton, Senior Vice President and Chief Development Officer



•

Denny Marie Post, Senior Vice President and Chief Marketing Officer

Overview

        Red Robin Gourmet Burgers, Inc., together with its subsidiaries, is a casual dining restaurant chain focused on serving an imaginative selection of high quality gourmet burgers in a fun environment welcoming to guests of all ages. We are committed to delivering superior experiences for our guests, which we believe will lead to operating and financial results greater than our casual dining peers. Through our engaged and motivated team members, our mission is to deliver a customized experience and create a unique connection with guests of all ages who want to enjoy craveable gourmet burgers in a fun, energetic environment with attentive and friendly service. We have identified and continue to search for opportunities that will drive strong financial performance through increasing guest traffic and revenue, improving operational efficiencies and expense management, enhancing our restaurant environments, and expanding our restaurant base. We have built key short-term and long-term strategies and initiatives around these opportunities, as well as optimizing returns through allocation of our capital. These objectives include:

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Increasing guest engagement to drive profitable guest traffic and sales in our restaurants through greater frequency of visits and increasing our average guest check;



•

Improving operational efficiencies and expense management through several initiatives designed to reduce costs and improve efficiencies throughout our organization; and



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Expanding our footprint through disciplined deployment of capital to both grow the brand and maximize long-term stockholder returns by optimizing the return on our capital investments, including development of new restaurants and restaurant remodels.

        We believe these initiatives also comprise the foundations for scalable and sustainable long-term growth, profitability, and increased stockholder value.

        Our executive compensation program supports this focus through several key objectives:

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Attracting, retaining, and motivating the best possible executive talent who have the experience and leadership skills capable of driving performance and top-line growth in sales;



•

Creating value for our stockholders by linking executive compensation to the achievement of measurable corporate objectives and the minimization of unreasonable and excessive risk-taking; and



•

Paying for superior results through a program that incents and rewards for achievement of both short-term and long-term organizational and functional objectives with a mix of compensation elements that place a significant portion of cash and equity compensation at risk.

        Accordingly, our executive compensation is comprised of three elements: base salaries, annual cash incentives, and long-term incentives that include both cash awards on three-year performance cycles

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and equity awards (stock options and restricted stock units). We also provide certain other customary health and welfare benefits and other minor compensation to executives, which are in line with those offered to other groups of our employees, and which comprise a modest portion of our named executive officer compensation. See "Summary Compensation Table" on page 38.

2013 Performance

        Mr. Carley joined the Company in late 2010 as chief executive officer. Under Mr. Carley's direction, we have pursued a course of performance improvement designed to drive top-line growth in sales and lay the foundations for scalable and sustainable long-term growth, profitability, and increased stockholder value. Our compensation objectives are designed to link incentives and rewards with current and long-term sustained achievement of these goals. For the past three years, we have experienced significant improvement in our operating performance. Highlights of our improved performance are set forth below. Note that our 2013 fiscal year was comprised of 52 weeks and our 2012 fiscal year was comprised of 53 weeks due to our fiscal calendar (we experience a 53^rd week every 5^th or 6^th fiscal year).

•

Annual revenues exceeded $1.0 billion in 2013, an increase of 4.1% over total revenues for fiscal 2012 (including the 53rd week); increased 6.8% in 2012 (including the 53rd week) over 2011, and 5.9% in 2011 over 2010.



•

Restaurant revenue grew by 4.1% in 2013.



•

For the 2013 full fiscal year, diluted earnings per share (EPS) grew approximately 15% to $2.22.

Annual RRGB Diluted Earnings Per Share

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Our stock price more than doubled during 2013, beginning the year around $35 per share and ending the year around $75 per share. As represented in the bar graph below, our stock price has steadily increased since Mr. Carley joined our Company as chief executive officer in September 2010. Since 2010, our stock price has increased from a high in the mid $20s to recent highs in the mid $80s.

RRGB Avg. Stock Highs & Lows

•

For fiscal year 2013, though still negative, our guest traffic exceeded the casual dining sector by 240 basis points as reported by Black Box Intelligence, a financial benchmarking report for the restaurant industry. In fourth quarter 2013, we gained market share for the seventh consecutive quarter as the Company's performance in guest traffic outpaced the industry.



•

We added 21 new Red Robin® restaurants and one new Red Robin's Burger Works® to our restaurant base in 2013.



•

We used excess cash generated during the last three years to benefit our stockholders in the form of share repurchases. Over the past three years, we have repurchased over $62 million or 13.3% of shares outstanding, including $5 million repurchased during 2013. Our board of directors approved a $50 million share repurchase authorization that became effective at the beginning of 2013 and that had $45 million remaining on the authorization as of the end of fiscal year 2013.

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As represented in the chart below, for the past three years, our cumulative total shareholder return on our common stock has shown marked improvement and compares favorably with the cumulative total return over the same period for the Russell 3000 Index, the Bloomberg U.S. Full Service Restaurant Index, and a Peer Composite made up of our peer group restaurants (See "Benchmarking" below beginning on page 27 for a list of our peer restaurants). The comparison assumes $100 was invested on December 31, 2010 in the Company's common stock and in each of the indices (including reinvestment of dividends based on calendar years ending December 31 for purposes of comparability).

Three-Year Indexed Share Price Performance

Executive Compensation Decision-making

        The compensation committee determines target total direct compensation for named executive officers by establishing base salaries and setting long-term and annual incentive compensation targets. When appropriate, the committee also approves special awards and modifies perquisites. When determining target total direct compensation, the committee considers the following:

•

Company performance and our pay for performance compensation program design.



•

Benchmarking data for our restaurant peer group at various levels between the 50^th and 75^th percentile for the target total direct compensation (base salaries, short-term incentives, and long-term incentives) for the peer group, based on disclosure in peer proxies and other applicable survey data.



•

Individual performance and areas of responsibility relative to the market data.



•

Compensation relative to other executive officers in the Company.

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Advice from the committee's independent compensation consultant.



•

The CEO's recommendations with respect to the compensation of the executives who report directly to him, including the other named executive officers.



•

Whether our compensation program encourages unnecessary or excessive risk taking.



•

Results of the Company's say-on-pay votes in prior years.

Pay for Performance Alignment

        Our compensation program is designed to pay for performance and link incentives with current and long-term sustained achievement of Company strategic goals. Accordingly, the majority of our named executive officers' compensation, excluding base salary, is incentive based, and is comprised of performance-based short-term and long-term awards. Such compensation therefore varies in value and is at-risk of forfeiture or reduced payout if performance goals are not achieved for cash-based incentives, or loss of value if our performance does not drive increases in our stock price. Financial measures such as EBITDA (earnings before interest, taxes, depreciation, and amortization) and ROIC (return on invested capital) used for the annual bonus and cash incentive grants are linked to the Company's strategic business plans that are reviewed and approved by our board of directors. Minimum financial targets must be achieved for any payouts of cash to be made under both the annual bonus and long-term incentive grants. Restricted stock units and stock options vest ratably over four years, the value of which is dependent, in whole or in part, on an increase in the Company's stock price.

        Annual compensation, which is comprised of base salaries and annual bonus opportunity, together with long-term incentives, result in total direct compensation targeted at approximately the 60^th percentile of our peer group, with annual cash compensation targeted at the median (50^th percentile) of our peer group, and long-term compensation targeted at the 65^th percentile of our peer group. Although total direct compensation is targeted above the median for our peer group, realization of that level of compensation occurs only upon achievement of both the short and long-term performance results.

        In 2013, "at-risk" pay (subject to forfeiture or partial or complete loss of value) made up 77% of total compensation for CEO Stephen Carley and 66% of total compensation for the other named executive officers as a group and included short-term and long-term incentives. Short-term incentive pay, aligned with achievement of annual business results based on EBITDA, comprised 30% and 33% of our CEO's and other named executive officers' total compensation opportunity, respectively. Long-term incentive ("LTI") awards that are designed to maximize retention and to link compensation to the Company's long-term stock price performance comprised 47% and 33% of our CEO's and other named executive officers' total compensation, respectively. LTI awards are based on achievement of longer-term business goals adopted as part of our multi-year strategy. Incentive awards of both cash and equity are paid pursuant to the Company's Second Amended and Restated 2007 Performance Incentive Plan (the "2007 Plan").

        The compensation committee believes that the annual incentives (which are generally based on annual Company EBITDA or other financial targets) and the long-term incentives (the cash portions of which are currently based on three-year EBITDA and ROIC targets) place a large portion of the executive's pay at risk because such pay will fluctuate or vary in value based upon the level of performance achieved by the Company. Because incentive awards are performance-based, they are at risk of forfeiture or reduced payout if performance goals are not achieved. Moreover, long-term equity awards are at risk of forfeiture if the executive does not remain with the Company until the equity vests, and are at risk of reduced realized value based upon Company stock price at the date of exercise.

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        Risk Profile of 2013 Named Executive Officer Compensation.    The charts below reflect the portion of the executives' 2013 compensation that is considered at risk, or subject to forfeiture or partial or complete loss of value. The portion of at-risk pay for Mr. Carley for 2013 was approximately 77% and for all other named executives was approximately 66%.*

CEO

Other Named Executive Officers

*

Percentages and pie charts exclude the special discretionary bonus because the compensation committee does not intend to regularly pay special discretionary bonuses. If the discretionary bonus were included, the portion of at-risk pay would be 81% for Mr. Carley and 72% for the other named executive officers.

        At-risk portions of the pay at the beginning of 2013 included the 2013 annual cash bonus opportunities (annual short-term bonus incentive) and the three-year long-term incentive grant (40% cash, 40% restricted stock units, and 20% options), all of which is at-risk pay. The cash portion of the LTI is subject to a three-year performance period measuring EBITDA and ROIC for fiscal years 2013-2015, payable, if earned, in 2016. The charts above assume payout of long-term cash incentives at 100% target levels. Options and restricted stock units vest ratably over four years, and therefore their value depends on the Company's stock price on the respective vesting dates. Components of the LTI grant are also at risk of forfeiture if the named executive officer does not remain employed by the Company through the performance or vesting periods. In addition, stock options do not achieve value unless the stock price increases. In-the-money options can lose value if the stock price declines below the exercise price.

Benchmarking

        Restaurant Peer Group.    Restaurant peer group companies are selected by the compensation committee upon recommendation of its compensation consultant and are based on their similarity to us with respect to several factors, including revenue, size, and scope. In 2013, the Company ranked in the 62^nd percentile for its peer group in sales, 50^th percentile in assets, and 24^th percentile in market value according to 2012 data analyzed by the compensation committee's consultant, AON Hewitt. P.F. Chang's China Bistro, Inc., and California Pizza Kitchen were previously included in our peer group

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but were removed because they are no longer publicly reporting. There were no other changes to our peer group in 2013. Our current peer group is comprised of the restaurant companies listed below:

Independent Compensation Consultant

        The compensation committee has retained AON Hewitt as its independent compensation consultant. Aon Hewitt assists with the compensation committee's annual review of our executive compensation program, cash and equity compensation practices, ongoing development of our executive compensation philosophy, and acts as an advisor to the compensation committee on compensation matters as they arise. AON Hewitt also advises the compensation committee on compensation for the board of directors. The compensation committee evaluated AON Hewitt's independence as its compensation consultant by considering each of the independence factors adopted by The NASDAQ Global Select Market® and the SEC. Based on such evaluation, the compensation committee believes that no conflict of interest exists that would prevent AON Hewitt from independently representing the compensation committee.

Risk Mitigation

        The compensation committee considers, in establishing and reviewing our executive compensation program, whether the program encourages unnecessary or excessive risk taking. The factors considered by the committee include:

•

the general design philosophy of our compensation policies and practices for employees whose behavior would be most affected by the incentives established by our compensation policies and practices, as such policies and practices relate to or affect risk taking by employees on our behalf, and the manner of their implementation;



•

our risk assessment and incentive considerations in structuring our compensation policies and practices or in awarding and paying compensation;



•

how our compensation policies and practices relate to the realization of risks resulting from the actions of employees in both the short term and the long term;



•

our policies regarding adjustments to our compensation programs and practices to address changes in our risk profile; and



•

material adjustments that we have made to our compensation policies and practices as a result of changes in our risk profile.

        The compensation committee believes that it has mitigated unnecessary risk taking in both the design of the compensation plans and the controls placed upon them because:

•

payouts under our annual and long-term incentive compensation plans are capped,



•

the performance goals relate directly to the business plan approved by the board of directors, and

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•

there is an appropriate balance between our annual operating achievements and longer-term value creation, with a particular emphasis on longer-term value creation for our executives.

        The compensation committee completes this evaluation annually. Accordingly, based upon the foregoing, the Company believes that the risks arising from its compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.

Say on Pay Vote Results

        At our 2013 annual meeting of stockholders, holders of approximately 99.4% of the votes cast on such proposal approved the advisory vote on the 2012 compensation of our named executive officers. The compensation committee did not make significant structural changes to our executive compensation program in 2013. The compensation committee believes the advisory stockholder vote indicates strong support for the Company's executive compensation program. The compensation committee will continue to consider the results of the advisory vote on executive compensation in future executive compensation policies and decisions.

Key Components of our Executive Compensation Program

Base Salary

        The compensation committee sets base salaries for our executives to reflect the scope of each executive's responsibilities, experience, and performance. The compensation committee reviews base salaries annually, and adjusts them from time to time to account for relevant factors such as market changes, as documented by the compensation consultant. The compensation committee also considers the CEO's evaluation of each executive's performance and reviews his salary recommendations for those key executives.

Incentive-Based Compensation

        Use of Different Metrics.    For our incentive-based compensation, the compensation committee utilizes a mix of performance metrics and time and tenure. Each type of metric serves a different purpose. The short-term (annual bonus) and the cash component of the long-term incentive awards are performance-based and require achievement of certain financial targets, measured over either one or three years. If the financial metrics are not achieved at a minimum threshold level at the end of the performance period, no payment is earned or made. The equity portion of the grants vests ratably over four years. The time-based vesting of the restricted stock units, a comparatively lesser portion of the total long-term incentive awards, is used primarily for retention purposes and to encourage stock ownership by executives, thereby aligning their interests with our stockholders. The stock options vest over time, but require improved stock price performance to realize value.

        Annual Performance-Based Incentive (Cash Bonus).    Annual performance-based cash bonuses are intended to reward achievement of short-term operating goals and financial performance that are incremental to long-term, sustained creation of stockholder value. Our annual bonuses are established with reference to the annual portion of our five-year strategic plan and, although measured in one-year increments, are designed to tie each year's results into a long-term target. As the Company's business evolves and develops, the long-term targets may be revised with concurrent impact on each year's annual planning. Generally, the annual performance metrics are financial-based measures that the compensation committee believes are highly correlated to our strategic goals described above. The compensation committee continually evaluates the measures against which we gauge our performance and may incorporate additional or alternative metrics to incentivize executives to achieve appropriate performance targets and respond to industry changes or market forces.

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        Each of our executives is eligible to receive an annual cash bonus based on achievement of certain performance objectives, predominantly based on annual EBITDA. The EBITDA measure was selected because we believe it best captures our operating results without reflecting the impact of decisions related to our growth, non-operating factors, and other matters. The EBITDA goal is intended to be a "stretch" goal, or challenging target, and is meant to encourage superior performance. The 2007 Plan permits the compensation committee to adjust, in its discretion, EBITDA for non-cash, non-recurring, or unusual items. The compensation committee approves the annual bonus plan based on achievement of a predetermined range of minimum threshold, target, and maximum-level EBITDA and approves payout of the bonuses, if any, following review of actual results. Bonuses are based on a percentage of the executive's salary and are set based on market and peer comparisons, and the corresponding dollar payout value varies up or down depending on the actual EBITDA performance level. Bonuses are not payable at all if the minimum threshold of EBITDA is not achieved. The compensation committee sets the EBITDA ranges each year based on performance expectations and other factors. The compensation committee may add or substitute performance measures in future plans. The compensation committee may also use various factors to exercise negative discretion when evaluating performance for purposes of awarding annual incentive compensation.

        In addition, the compensation committee may approve special bonuses on an individual or group basis in recognition of extraordinary achievements, or to address other special situations.

        Long-Term Performance-Based Incentives.    The compensation committee determines the long-term incentive grants for the executive officers, including the named executive officers, pursuant to market data and with respect to comparisons to peer restaurant compensation practices. The compensation committee believes that a mix of performance and time-based cash and equity incentives provides an element of performance risk for executives and encourages equity ownership, thereby aligning the interests of executive officers with our stockholders.

        Long-term incentive grants consist of equity awards, typically in the form of restricted stock units and stock options, and a long-term cash incentive component. They are designed to focus management on our strategy of driving consistent, sustainable achievement of long-term goals, both incrementally and over long performance periods. The annual granting of multi-year performance compensation (including three-year performance targets) is designed to ensure that the execution of our strategic plan considers appropriate risks and returns and allows for initiatives that are multi-year in nature.

        Currently, the long-term incentive awards for executives consist of an equity component comprised of 40% stock options and 20% restricted stock units (both of which vest ratably over four years), and a 40% performance-based cash component. We use stock options to align the interests of our executive officers with stockholders because value is realized only if the stock price appreciates (stock price performance). The cash component is payable if EBITDA or ROIC targets are achieved over a three-year measurement period. We use restricted stock units to help retain our executives and further align their interests with our stockholders. Incentive awards of both cash and equity are paid pursuant to the 2007 Plan.

Modest Perquisites

        We offer relatively few perquisites to our executives, but we do provide certain benefits such as car allowances, meal allowances, and discounts at our restaurants to our named executive officers and certain other employees. In addition, where appropriate, we offer usual and customary relocation expense reimbursements including related tax reimbursements.

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Summary of 2013 Compensation Activity

Base Salary

        During 2013, the compensation committee did not make any changes to named executive officer salaries. Current named executive officer salaries are set forth below. The compensation committee considers various factors when setting base salaries including peer compensation practices, Company performance, individual contributions, and other relevant matters.

        Each of Mr. Carley, Mr. Brown, and Ms. Post has an employment agreement with the Company, the terms of which are discussed below under "Executive Employment Agreements."

Incentive-Based Compensation

        2013 Annual Performance-Based Cash Incentives.    For 2013, annual performance-based cash bonuses were contingent upon achievement of an annual Company EBITDA target to focus our efforts on continuing to improve performance and maximizing stockholder returns. In fiscal year 2013, we continued to realize significant movement toward these goals, reporting increased revenue and net income in fiscal 2013 over 2012 and sustainable cost reductions. We view these achievements as progress toward establishing best in class operations, profitability, and brand value.

        Target bonus opportunities under our annual performance-based cash incentive program are equal to a pre-established percentage of the employee's base salary. Bonuses are determined by first comparing the Company's actual fiscal year EBITDA to a target level of EBITDA for the year established by our compensation committee. For 2013, the EBITDA target was $102.85 million. Preliminary bonus amounts based on achievement of EBITDA targets can range from 85% to 115% of the executive's target bonus opportunity, and for 2013 equaled 108.9% of the employee's target bonus opportunity based on our actual 2013 EBITDA of approximately $105.1 million, which was 102.2% of target. For purposes of calculating our 2013 bonus, EBITDA, as defined in the Company's earnings releases filed with the SEC on Form 8-K, is further adjusted for unusual or nonrecurring items including impairments and the special discretionary bonus.

        The 2013 annual performance-based cash bonus incentive also included a feature, if EBITDA of at least 100% of the target level was achieved, to allow for the preliminary bonus amount to be increased by a factor of up to 120% based on achievement of guest traffic outcomes favorable to our casual dining peers as reported by Black Box Intelligence. Due to our achievement of above-target EBITDA

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performance goals in 2013, and above-target guest traffic increases, eligible employees, including our executive officers, earned a bonus payout of 130.7% of target, as reflected in the tables below.

        The actual amounts of our 2013 annual performance-based cash incentives paid to our named executive officers in February 2014 for fiscal 2013 performance are as follows.

        2013 Discretionary Bonuses.    The compensation committee has the ability to approve special bonuses on an individual or group basis in recognition of extraordinary achievements or to address other special situations. In November 2013, the compensation committee awarded a one-time special discretionary bonus to the Company's executive officers in recognition of the Company's extraordinary performance during 2013. Such performance is described in detail above under the heading "2013 Performance." The compensation committee determined that a one-time special discretionary bonus for the executive team was appropriate given the individual contributions of each executive, the Company's one- and three-year performance relative to its peers, especially the Company's relative total shareholder return, and the substantial increase in shareholder value that had been created in 2013. The amount of discretionary bonus for each executive was determined based on the executive's individual contribution and performance during 2013. The compensation committee does not intend to regularly pay special discretionary bonuses.

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        Set forth below is a chart showing the discretionary bonus amount earned by each named executive officer in 2013.

        2013 Long-Term Incentive ("LTI") Program.    The 2013 LTI grants made to named and other executive officers followed the same program design implemented in 2011 and used in 2012. For our executives, the program consists of an equity component comprised of 40% stock options and 20% restricted stock units (both of which vest ratably over four years), and a 40% long-term cash incentive component measured by company performance over three years. The LTI program grants are made under the 2007 Plan. It is intended that this program will continue annually in overlapping cycles.